Shared by:
Miles Bodzin, DC
www.CashPractice.com
Why Have a Cash Practice?
October 1, 2003
Here is the latest issue of Dr. Bodzin's Nuts & Bolts of Cash Practice
Newsletter. I hope you enjoy it and learn something new. If you have any
questions, feel free to contact me by email.
------------------------------------------------------------------------
I was on the phone today with one of the doctors who recently bought my
Cash Practice Calculator and we got into the subject of the philosophy
behind running a cash practice.
------------------------------------------------------------------------
It seems that doctors automatically make the assumption that running a cash
practice means doing prepays. Well that couldn't be further from the truth.
Having a cash practice is not about having everyone prepay for their care.
A practice full of prepay patients is a practice out of balance. It is a
practice dependent on new patients. It is a practice with the same stress as a
non-cash practice - where are my new patients? No new patient means no
new income.
If running a cash practice is not about prepay then what is it about. The
real philosophy of having a cash practice is being in control of one's own
destiny. Not being dependent on some third party to support your life. As
Dr. Fred Scofield told me years ago, "Taking Charge!"
Although the philosophy behind having a cash practice is taking charge, the
Purpose of having a cash practice is to support your lifestyle. That's right.
The purpose is to support your lifestyle. I choose to have a lifestyle that is
fun and free from as much stress as possible. You can too.
------------------------------------------------------------------------
"Dr. Miles, this is the missing link that I've been looking for. I will
bring in almost $6,000 in revenue for the same work... A nice 50%
increase... These were the easiest closes I have had in 18 years of practice.
That certainly makes me feel a whole lot better with my future. I definitely
recommend your Cash Practice Calculator."
- William Moyal, D.C.
Miami, Fl
------------------------------------------------------------------------
Back to the assumption that cash practice is about prepays being wrong.
The key to having a STRESS FREE cash practice is creating CASH FLOW.
It is not about having a great month of collections. I love those practice
management ads with all the testimonials about how doctor so and so
collected $xyz that month. Big deal! It's not about a big month's
collections. Anybody can have a big month. It's about creating a consistent
flow of income that supports the practice and your lifestyle. Prepays,
although nice to have, do not support a "consistent" cash flow.
I'll repeat. The key is to have enough CONSISTENT monthly income from
your cash patients to support your practice and lifestyle. Lots and Lots and
Lots of patients on monthly payment plans accomplishes this. If you had
200 patients each paying you $150 a month on average, you would have a
consistent cash flow of $30,000 per month.
Do I accept prepays? Yes, it is an option for our patients. However, we also
encourage monthly payment plans. My favorite it the Option 2 choice on
our cash plans. Option 2 is where a patient pays a third down and the
balance is paid monthly. This down payment creates commitment on the
part of the patient, where as the monthly payments creates the consistent
cash flow. And quite frankly, patients who pay monthly stay longer
whereas prepay patients have to "renew" at the end of their term and any
time a patient has to make a "choice" regarding renewing, you will lose
some of them. However, if a patient is already used to paying a monthly
fee, when the renewal comes up, the monthly fee should be lower (since
they are coming in less often). They're happy to continue, especially when
the fee has gone down. Hey Mary, your monthly fee is going down from
$285 to $155 per month. Isnžt that great!ū
After a long enough period of time, you will have built up a clientele of
patients who consistently, month-after-month, pay you to care for them.
You can literally go months WITHOUT a new patient walking in the door.
Do you know how good it feels to be able to just take care of people and
not be concerned about new patients? It is truly the definition of a fun,
stress-free practice!
I hope this was helpful. If you need any further assistance, just let me
know.
Yours in excellent service,
Miles Bodzin, DC
www.CashPractice.com